Each week, the Students in the Free Enterprise (SIFE) Team from the Henry W. Bloch School of Management, with assistance from a group of respected business people, will answer your financial questions.
Habib Hassan, biology major, asked: “What are some common mistakes that students make with their money?”
The most common, and usually the most costly, mistake students make involves credit cards.
Credit cards are not necessarily bad, because they do serve a good purpose sometimes.
However, many college students do not have the fiscal maturity to responsibly own one of these cards.
Usually, students apply for cards as a tool for emergencies; then it starts being used for fast food, gas, movies and other small purchases, but these small purchases add up quick.
Then the bill comes and it’s several hundred dollars, which of course you only want to pay the minimum on, so then interest starts building on the remaining balance, and before you know it you are in serious debt.
The easiest way to avoid this downward spiral is to just not tempt yourself. Pay with cash or use a debit card, which sets a definite limit on your spending.
Another common mistake students make is not setting a monthly budget. This is a very simple task and it does not take very long to do.
All you need to do is figure up your income and expenses for the month.
Then subtract your expenses from your income.
Any money left over you can use for fun, or even better, put into savings in case of an emergency.
Many people often overlook this next mistake because they think it’s not that big of a deal.
But comparing prices and using coupons on everyday items such as toiletries, cleaning supplies and especially food can really help you save quite a bit of money.
Many stores put out weekly ads displaying specials; make sure to compare prices so you are always getting the best deal.
Also, picking up a Sunday paper is well worth the couple dollar investment because there are usually coupons worth $50 or more in savings for the everyday items you buy.
Plus, it is a relaxing way to spend your Sunday morning.